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Connecting the Head to the Feet

Published in Hebrew in Status - Management Thinking Magazine, January 2004 (issue 151)
By Amnon Danzig, Senior Facilitator and Consultant at ZOOZ, the Israeli Manager of Stren Stewart & Co.

Part II   

B. Implementing Insights In Middle Management

Great! We have a Strategy. It is well-phrased. The board is satisfied. Seemingly, all is well. In fact, we haven't even started. The reason is that so far those involved in preparing the strategic infrastructure haven't considered how to make the entire organization "sing the chorus". Simply put - whoever made up the plan knows its logic and details inside-out. How does one go about sharing that knowledge? It may be compared to brewing an intricate dish: the written recipe does not reflect the depth of knowledge necessary for cooking it. This is the exact difference between the chef and the novice cook. Worse yet - in cooking, the basic assumption is that the novice cook wants to make the dish. Unfortunately, the business reality within the organization is such that the amateur cook is not always connected to the chef's agenda.

A substantial number of organizations have realized that the biggest problem is implementing the chosen strategy at all levels of management. Each firm’s strategic process requires the investment of considerable management time. The result should be a clear vision and tools for realizing it.

B. Know the competition

You need information from relevant databases, retailers or reps regarding market size, prices, competition, strategic alliances, IT and all other category entry barriers.

Which are the relevant category retailers? How big is the category and is it saturated? Examine the competition as if it was about to face you head-on or buy you out. This information must serve as your starting point for defining the field of operation. Cross-checking information is vital. 

C. The local connection

You should identify local people you trust, with whom you may work, and which will provide guidance to you or the people working for you on this project. If you do not know the person, convey a clear message to him that it is in his best business interest to do everything in his power for the success of the business.

D. The "Mix"

Once you have decided on the category you wish to enter, you should learn about the product mix, that is - which products are a "must have" in the category, where is the major business being conducted, and what could get you a second meeting with retailers.

A good local representative should be able to set up a meeting with anyone that is relevant to you, especially an initial meeting. What have you got to offer - good prices? An exceptional product? A convincing and innovative presentation?

In today's reality it is impossible to compete in some of the retail markets with Far Eastern manufacturers. Therefore, don’t even try to do so. 

E. What next?

Find a local person to help you get data on the most competitive retailers. Consider whether you can sustain the expected price levels. Offer a relevant and attractive price in market terms and perceived value for money.

Find a good and ethical assets attorney (expect the fees to be high), learn the rules, strengths and limitations of the arena you are about to enter.

Force yourself to be innovative. Use one of the available means of concept testing and introduce innovation to your defined product line (some of these methodologies are subsidized by the Nitsos Program).

Launch a category mainstream product rather than a marginal one. With time, your product should redefine the mainstream for the chosen market niche. 

F. Feedback

When you have a clear idea, and you know its competitive aspects and have the appropriate (or at least the affordable) legal protection, as well as a general product design, it is time to ask for feedback from relevant category retailers. These may be general retailers, drug stores or home improvement stores, but your first "shot" should be aimed at at least 2 out of 5 major objectives. Take these meetings seriously and prepare your idea, presentation, price and excitement-generation well.

Remember that until you reach the end of the process, you'll be at least $100,000 poorer, and will have replaced at least one or two retailers. Depending on market size and segmentation, all you need is considerable activity with one large retailer in order to fulfill your dreams. 

G. What? No orders?

Your American partner will help you set up meetings and analyze the results, apply some of the tips from retailers and assist in planning the next stage in terms of schedule, initial launch and follow-up. He should advise on the desired frequency of updating retailers on developments. At this stage you will not receive any orders, as development is based on connections and talks.

H. Product management

Assuming you get a positive response, and still have the resources to continue, when you land back home you should hire an Israeli product manager to help with the final stages of industrial design, models, standards, approvals, packaging, points-of-sale, MarCom, production schedule and budgets.

One must plan to ensure a smooth product line penetration, marketing and production. The product must be attractive and convincing at the point of sale in order to ensure commercial success.

Finally, nine to twelve months later, the presentation of the final product, all "dressed-up" and ready for sale, is important for settling the accounts and getting extensive feedback. Hopefully, this time you should see three out of five major target retailers and several lower-level retailers.

I. Logistics

Logistical considerations depend on the category norm, the identity of the major clients and the important forces in the category. Some prefer to import and enjoy favorable prices, while others choose a local solution, providing a broader service. You should provide solutions for both types, enabling import but also supplying a local product, whether through your own logistics or with an American distributer. These issues should be determined before sales begin, with accurate and acceptable answers provided to your sales team for all major questions.

J. Sales infrastructure

The U.S. sales team should establish itself and be involved well before sales begin. The American partner should locate, train and prepare them for the beginning of the process. Do not exclude Canada.

These guidelines do not include "dos" and "don'ts" in working with reps, although one cannot efficiently manage 7-10 sales representatives via long-distance control. An on-site sales manager is essential, for working with your reps, or the product will never take off. 

K. Sell, Sell, Sell

Now you are ready to sell, you have a great product, launching was successful, one in three Americans wants your product and retailers love you.

In spite of the temptations and distractions - do not rest. Continually seek ways to increase market share, broadening coverage and diversity. Make sure that you now determine the follow-up plan, if you haven't already done so, while considering strengths: a top-notch local sales force and an innovative product line.

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